Tag: scott mlyn

Toys R Us’ status as the most important toy store in town left it cavalier, if cocky at times, according to conversations with former employees, executives and industry insiders, who spoke to CNBC on the condition of anonymity. The story begins with Lazarus, the store’s visionary who wanted the “R” written backward — an ode to childlike scrawl. Lazarus, who has been described as one of the great merchants of his time, expanded a baby furniture store he owned into a toy store. In its heyday in th

The toy emporium that Charles P. Lazarus envisioned has been reduced to dusty floors and empty shelves.

Much has been said about the demise of the toy empire, which this week announced its plan to liquidate. There have been fingers pointed at corporate raiders, Amazon and big-box stores. All contributed to its undoing.

Ultimately, though, Toys R Us’ collapse is a story of loyalty run dry. The store in its early days fostered devotion from customers and toymakers. In the end, it lost hold on both.

Toys R Us’ status as the most important toy store in town left it cavalier, if cocky at times, according to conversations with former employees, executives and industry insiders, who spoke to CNBC on the condition of anonymity. It didn’t invest in its stores, even as it was adding to the fleet, leaving it vulnerable when new competition moved in.

The story begins with Lazarus, the store’s visionary who wanted the “R” written backward — an ode to childlike scrawl. Lazarus, who has been described as one of the great merchants of his time, expanded a baby furniture store he owned into a toy store. By 1978, he had created a toy superstore large enough to become a public company.

In its heyday in the 1980s and 1990s, it was the most important toy store in the country, if not the world. Its strength grew as competitors Kiddie City and Child World went out of business.

Baidu ended the year with a 32 percent loss, while Tencent was down 23 percent, and Alibaba dropped 21 percent. And it’s Tencent that’s flashing a buy signal, says Craig Johnson, chief market technician at Piper Jaffray. “If I look at the chart of Tencent, here’s a stock that’s traded off meaningfully. A key technical indicator, its moving average convergence divergence (MACD), is also suggesting a bullish lean to the stock, says Johnson. A stock’s MACD demonstrates the correlation between a 26-

Even with the U.S.-China trade war still raging, Chinese stocks are on fire.

Increasing trade tensions between the U.S. and China through the back-half of 2018 took a sledgehammer to Chinese shares. Baidu ended the year with a 32 percent loss, while Tencent was down 23 percent, and Alibaba dropped 21 percent.

However, the FXI China large-cap ETF has surged 7 percent in the past three months, while U.S.-listed China-based stocks such as Baidu, Alibaba, Tencent and Sina have rallied by at least 8 percent to begin 2019. And it’s Tencent that’s flashing a buy signal, says Craig Johnson, chief market technician at Piper Jaffray.

“There’s certainly some opportunities to trade here,” Johnson said on CNBC’s “Trading Nation” on Friday. “If I look at the chart of Tencent, here’s a stock that’s traded off meaningfully. We’ve now just reversed the downtrend.”

Tencent had plummeted 47 percent from its January peak last year to its trough last October. Since that bottom, it has rallied 35 percent to four-month highs.

A key technical indicator, its moving average convergence divergence (MACD), is also suggesting a bullish lean to the stock, says Johnson. A stock’s MACD demonstrates the correlation between a 26-period exponential moving average and a 12-period exponential moving average. When measured against a baseline, the indicator can suggest bullish or bearish momentum.

“When we’ve seen a MACD buy signal happen like we have right here, we’ve seen that 30 days later that the stock is typically up almost 13 percent,” Johnson explained. “This would be one we’d be buying.”

The market’s win streak may be just beginning. “It’s got an awfully good track record as a contrary indicator.” Each time the index last year spiked to either record or near record highs, Yardeni found the S&P 500 Index entered correction territory. The S&P 500 closed out the third week of January out of correction. He predicted the S&P 500 will be 15 percent higher from current levels by year’s end.

Edward Yardeni, who spent decades on Wall Street running investment strategy for firms such as Prudential and Deutsche Bank, predicts stocks will break out to all-time highs this year.

He’s partly building his bull case based on a chart pointing to negative market sentiment.

“At the end of last year the bull-bear ratio, which is something we watch from Investors Intelligence, fell below one,” the Yardeni Research president told CNBC’s “Trading Nation” on Friday. “It’s got an awfully good track record as a contrary indicator.”

Each time the index last year spiked to either record or near record highs, Yardeni found the S&P 500 Index entered correction territory. It appears an opposite trend is unfolding right now.

“Bearishness was just so widespread that the market had a technical bounce, and now the fundamentals are going the right way,” added Yardeni.

It’s a scenario he predicted on “Trading Nation” on Dec. 26 as stocks were staging a historic rebound from the Christmas Eve meltdown. According to Yardeni, investors were too pessimistic about a recession, the Federal Reserve’s interest rate policy and the U.S.-China trade war.

“A lot of these things seem to be coming around in the right direction here, and so the markets have done extremely well,” he said.

The S&P 500 closed out the third week of January out of correction. The index now on its longest win streak since August — up four weeks in a row on signs U.S.-China trade tensions may be abating and encouraging fourth quarter earnings reports.

Yardeni said those factors are ultimately driving a year-long powerful market rebound. He predicted the S&P 500 will be 15 percent higher from current levels by year’s end.

“I’m still sticking with 3100 and feel better about it,” said Yardeni, who noted valuation multiples, low interest rates and inflation is setting Wall Street up for a very good year.

As the earnings season continues to turn up big winners, Morgan Stanley offers a list of its best trading ideas. Earnings season kicked off this week as investors digested the first batch of numbers coming out of a slew of big banks. Fourth-quarter earnings are expected to be strong, with the Wall Street consensus seeing 14.7 percent growth. Morgan Stanley put together a list of out-of-consensus calls that will be big movers in this earnings season.

As the earnings season continues to turn up big winners, Morgan Stanley offers a list of its best trading ideas.

Earnings season kicked off this week as investors digested the first batch of numbers coming out of a slew of big banks. Fourth-quarter earnings are expected to be strong, with the Wall Street consensus seeing 14.7 percent growth. Morgan Stanley put together a list of out-of-consensus calls that will be big movers in this earnings season.

Greenberg, who was previously CEO of premium movie service Epix, had spoken to Walmart about developing a service aimed at “Middle America,” the people said. The initial success of the “Roseanne” revival last year inspired other content creators to go after that type of audience. Vudu has taken a small step in the direction of original content, agreeing to retool the 1983 comedy “Mr. The service’s focus will continue to be on a broader library of movies and shows. The company is also reportedly

Greenberg, who was previously CEO of premium movie service Epix, had spoken to Walmart about developing a service aimed at “Middle America,” the people said. The initial success of the “Roseanne” revival last year inspired other content creators to go after that type of audience.

But talks with Walmart broke down after Walmart couldn’t get comfortable with making a large investment in content, a business where it has no real experience and where competitors such as Netflix can spend more than $10 billion a year on new TV shows and movies.

Vudu has taken a small step in the direction of original content, agreeing to retool the 1983 comedy “Mr. Mom” into a digital series. The service’s focus will continue to be on a broader library of movies and shows. The Vudu business is under Marc Lore, Walmart’s head of e-commerce.

“Vudu has developed a strong platform, and we aim to continue to bring our customers more content, on more devices, at the best possible price,” Tara Raddohl-House, a Walmart spokeswoman, said in an e-mail.

Greenberg, meanwhile, has held talks with several other retailers, including Costco, about building out a service geared toward average Americans, but no agreement has been reached, said a person familiar with the matter. Costco didn’t immediately respond to a request for comment. The company is also reportedly exploring the launch of a streaming service for its top customers.

UBS initiated its rating for CVS Health at buy on Thursday, saying the opportunity is “too good to pass up.” “The wall of worry around CVS’ 2019 earnings guide and concerns around the timing of the next positive catalyst have pushed CVS stock down to where the risk-reward is very appealing,” the bank’s analyst Kevin Caliendo said in a note on Thursday.

UBS initiated its rating for CVS Health at buy on Thursday, saying the opportunity is “too good to pass up.”

“The wall of worry around CVS’ 2019 earnings guide and concerns around the timing of the next positive catalyst have pushed CVS stock down to where the risk-reward is very appealing,” the bank’s analyst Kevin Caliendo said in a note on Thursday.

If fewer people are buying homes, especially first-time buyers, then they remain renters, which is boosting the market. Rent prices for single-family homes increased 2.9 percent annually in November 2018, according to CoreLogic. Demand for rental homes is now so strong, and supply so low, that rents have nowhere to go but up. Of course all real estate is local, and hot markets like Las Vegas, Phoenix and Orlando are seeing the highest rent gains for single-family homes. “For example, rent prices

The slowdown in home sales and home price gains in most major U.S. markets is causing the opposite effect in the rental market, especially for single-family rental homes.

Home prices logged a 5.1 percent annual gain in November, the smallest gain since August 2015.

If fewer people are buying homes, especially first-time buyers, then they remain renters, which is boosting the market.

Rent prices for single-family homes increased 2.9 percent annually in November 2018, according to CoreLogic. That is up from 2.8 percent annual growth in November 2017.

Demand for rental homes is now so strong, and supply so low, that rents have nowhere to go but up. The gains are especially high for lower-end rental homes, up 3.8 percent annually in November. High-end rents, however are still gaining, up 2.6 percent annually compared with 2.3 percent gains in November 2017.

Of course all real estate is local, and hot markets like Las Vegas, Phoenix and Orlando are seeing the highest rent gains for single-family homes.

These markets were hardest hit during the housing crash more than ten years ago, as thousands of homes purchased by flippers using subprime mortgages defaulted on their loans. These cities had the highest foreclosure rates in the nation, and many of those foreclosures were purchased by large institutional investors and turned into rental properties.

Both Orlando and Phoenix are seeing strong employment gains at nearly five times the national rate. Consequently, demand for rentals is heating up.

Despite the gains, however, rents have still not seen the heat that the for-sale housing market has in the past few years.

“Long-term rent increases have been lower than long-term home price increases,” said Molly Boesel, principal economist at CoreLogic. “For example, rent prices increased 17 percent over the past five years, compared with a 32 percent increase in home prices over the same period. Additionally, lower-priced rentals and homes increase 1 ½ to 2 times faster than higher-priced rentals and homes.”

Vacancies for single-family rentals are very low and declined in November to 4.6 percent from 4.7 percent in October, according to Morningstar Credit Ratings. While part of that is seasonal, close to 79 percent of renters are renewing their leases, which is historically high.

Volume was 11 percent lower compared with one year ago, when mortgage rates were 42 basis points lower. Still, it is also important to note that a jump in mortgage rates last January caused mortgage demand to drop, so the annual comparisons are now off a lower volume. They may also be eager to take advantage of the dip in mortgage rates. Both Wells Fargo and J.P. Morgan reported lower mortgage origination volume in the last quarter, according to company earnings releases Tuesday. Simply put, ban

Mortgage demand continues to recover sharply, after ending last year in the basement.

Total mortgage application volume rose 13.5 percent last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

That is its highest level since February 2018 and came after a 23 percent jump the previous week. Volume was just 0.5 percent lower compared with the same week one year ago.

Refinance demand drove the gains, with those applications rising 19 percent for the week to the highest level since last March. Volume was 11 percent lower compared with one year ago, when mortgage rates were 42 basis points lower.

The drop in mortgage rates over the past two months has given new life to the refinance market. Still, it is also important to note that a jump in mortgage rates last January caused mortgage demand to drop, so the annual comparisons are now off a lower volume. Refinance volume is still historically low.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) remain unchanged at 4.74 percent, with points decreasing to 0.45 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The rate has fallen 20 basis points in the past four weeks.

“Uncertainty regarding the government shutdown, slowing global growth, Brexit, a more patient Fed, and a volatile stock market continued to keep rates from increasing,” said Mike Fratantoni, MBA’s chief economist. “The spring homebuying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market.”

Mortgage applications to purchase a home also rebounded 9 percent for the week to the highest level since April of 2010. Purchase volume was 11 percent higher compared with the same week one year ago. Buyers may be jumping in before the start of the usually competitive spring season. They may also be eager to take advantage of the dip in mortgage rates. More inventory came onto the market at the start of the year, and that may also be adding to activity.

The refinance share of mortgage activity increased to its highest level since January 2018, 46.8 percent of total applications, from 45.8 percent the previous week, and the adjustable-rate mortgage (ARM) share of activity increased to its highest level since October 2014, 9.2 percent of total applications. The average loan size for refinance applications reached a survey high at $353,100.

“Borrowers with larger loans tend to be more responsive to a given drop in mortgage rates, and we are seeing that so far in 2019,” Fratantoni said. “Furthermore, borrowers with jumbo loans are also more apt to take adjustable-rate mortgages as opposed to fixed-rate loans. Thus, it is not surprising to see the ARM share at its highest level since 2014. These borrowers may also feel more confident taking an adjustable-rate mortgage given the expectation of a more patient Fed.”

Although it is just one week’s read, the jump in purchase demand bodes well for the start of the spring market, indicating strong demand. High home prices were sidelining buyers last spring and higher mortgage rates last fall only exacerbated the weakness. Both Wells Fargo and J.P. Morgan reported lower mortgage origination volume in the last quarter, according to company earnings releases Tuesday.

Here’s why one trader thinks PayPal’s about to break out 15 Hours Ago | 03:41PayPal shares are about to pay up, said TradingAnalysis.com founder Todd Gordon, who believes the stock is headed for uncharted territory. On a weekly chart of PayPal, Gordon points out that he sees a “beautiful uptrend” in the stock, which has shown “amazing relative strength” amid a very volatile market. And on a daily chart of PayPal, Gordon indicates that the stock is breaking through resistance at $89 and “should b

PayPal shares are about to pay up, said TradingAnalysis.com founder Todd Gordon, who believes the stock is headed for uncharted territory.

Shares of the mobile payment provider are up more than 8 percent to start the year and are within spitting distance of their all-time high.

“The stock’s been acting extremely well on a volatile tape here in the last several months, and it looks like we’re set to move above resistance,” he said Tuesday on CNBC’s”Trading Nation.”

On a weekly chart of PayPal, Gordon points out that he sees a “beautiful uptrend” in the stock, which has shown “amazing relative strength” amid a very volatile market. Shares are up nearly 20 percent since the markets bottomed out on Dec. 24.

And on a daily chart of PayPal, Gordon indicates that the stock is breaking through resistance at $89 and “should be able to continue higher into the $100 region.”

Given that the company is set to report earnings on Feb. 1, Gordon wants to sell a put spread going into the event, thanks to the heightened implied volatility, or the price of options, in the stock. Gordon suggests selling the Feb. 1 weekly 92-strike put and buying the Feb. 1 weekly 88-strike put for a $1.61 credit.

Since Gordon is taking in $1.61 on the put spread, if PayPal rallies and closes above $92 on Feb. 1 expiration, he would make the $161 credit on the trade. But if PayPal were to close below $88, then he would lose up to around $240 on the trade.

One tech group is outperforming the rest of the market so far this year 3:53 PM ET Mon, 14 Jan 2019 | 03:28Software stocks are leading the tech sector, and broader market, in a strong start to 2019. Two software stocks illustrate how the group as a whole should continue its breakout, says Wald. “Also, mobile payments company PayPal, breaking through multimonth resistance in a difficult market tape — we think that is telling. The stock has surged 18 percent over that period in one of the best per

One tech group is outperforming the rest of the market so far this year 3:53 PM ET Mon, 14 Jan 2019 | 03:28

Software stocks are leading the tech sector, and broader market, in a strong start to 2019.

The XSW S&P software and services ETF has surged 7 percent in the past two weeks, better than the 3 percent gain on the XLK tech ETF and 4 percent advance on the S&P 500.

Ari Wald, head of technical analysis at Oppenheimer, says it makes sense to keep betting on the winners.

“We’re all about leadership as momentum investors,” Wald said on CNBC’s “Trading Nation” on Monday. “Our overall macro view [is] that a premium is going to continue to get placed on these high-growth companies in a low-growth world.”

Some of the segment’s biggest names, including Adobe, Salesforce.com, PayPal and Microsoft, trade at an elevated valuation compared with the rest of the market. Salesforce, for example, trades at 54 times forward earnings, well above the S&P 500’s 15 times multiple.

Two software stocks illustrate how the group as a whole should continue its breakout, says Wald.

“First, the software company Salesforce made a higher low in December, while the rest of the market was selling off and fell to that extreme bottom,” said Wald. “Now, as the market turns higher, you’re starting to see Salesforce come out of the consolidation pattern it’s been in.”

Salesforce has added 4.5 percent in the past three months as the S&P 500 tumbled 6 percent. The company is still 8 percent off its October record high.

“Also, mobile payments company PayPal, breaking through multimonth resistance in a difficult market tape — we think that is telling. That’s the type of relative strength that we think you want to own,” said Wald.

PayPal has had an even better stretch over the past three months. The stock has surged 18 percent over that period in one of the best performers of the S&P 1500 software and services segment.

“I kind of want to stay defensive, and I really like Google,” Schlossberg said on “Trading Nation” on Monday. “It’s held pretty well in this very, very soggy tape.”

While Schlossberg says its advertising business continues to thrive, the real potential is in artificial intelligence.

“They are leaders in artificial intelligence,” he said. “Some analysts think there could be a $20 billion hardware business going forward for them in artificial intelligence. That’s a story that the market really isn’t fully appreciating.”

Alphabet has fallen 2.5 percent in the past three months. Its stock is in a correction, having fallen 17 percent from its record high set in August. Any drop of more than 10 percent from 52-week highs indicates correction territory. The company is now listed in the communications services S&P 500 sector rather than technology.